Chapter 8 - investment accounts

[David Carlson]

As I recall, the lots function was reworked fairly recently, and I believe
that it can work well if the user is careful about entering his data.
However, I have not tested it with my data.

I hope that it can now facilitate correct cost basis tracking and accurate
gain/loss calculations for transactions involving multiple and partial lots.

I believe Chris is updating the documentation of the lots function to match
the changes, and in his November 15 post to this thread he pointed out that
the lots function does not directly resolve the long standing issue of
tracking capital gains as defined by US government reporting requirements
compared to to simply balancing the value of the security account when
there are closing transactions.

The government's position that commissions be included in net gain
calculations is reasonable and can be accommodated in GnuCash by simply
using net values throughout.  However, this does not allow tracking
commissions, which, for example, could be useful in a decision whether to
use a full service brokerage versus using a discount broker.

Part of the problem of lot tracking when commissions are separated out is
allocating
partial expenses along with the gains.  The most difficult part, as I see
it, is the need to re-assign costs that were incurred in the opening
transaction(s) to a location where they can be found and reported along
with the costs incurred in the closing transaction(s) for a tax report.  I
think that is the essence of the question that Chris asked in his November
15 post, and I do not have an answer for him.

Historically, GnuCash was unable to do this, and that is why many users
(myself included) have been tracking capital gains separately for tax
purposes.  The question is whether there is a method to accomplish both
within GnuCash.

I suspect that part of a complete package would be a new report designed
specifically to produce a capital gains tax report including appropriate
separation of short term vs long term gains.

Perhaps another user can address those questions in a way that could work
at least in all jurisdictions that have capital gain reporting rules
similar to the US.

David C

On Thu, Nov 17, 2016 at 2:15 AM, Jamestk <davidjamestk at hotmail.co.uk> wrote:

> Could someone clarify what the exact issue is please. My input method has
> been to enter all parts of the purchase/sale transaction as per tutorial,
> will this create inaccurate reports due to the following?
>
> Was this the original problem which surfaced a while back on my previous
> visits, it is a while back but I know there  was a reason for discontinuing
> using lots. - thanks, David
>
> > I can imagine the argument that if you are going to include commission
> in>
> > capital gains calculations, then you should enter the net price
> > (including> commission), and not record commission as its own split,
> > regardless of this> adding an misleading price into the price database.
> > You could just add the> commission as part of the transaction description
> > if you wish to track it.I include commissions and fees in the buy and
> sell
> > splits because it makes the gain/loss calculations much easier. True, the
> > price won't match what the exchange reports, but it's the effective price
> > I paid and immediately reflects the unrealized loss caused by having paid
> > those commissions and fees. That approach works only because commissions
> > and fees are deductible in US tax law.
>
>
>
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